Macau casinos experienced their most profitable month in October 2024 since January 2020, generating $2.59 billion in gross gaming revenue (GGR). This increase was detailed in the monthly report by Macau’s Gaming Inspection and Coordination Bureau, which highlighted a 6.6% year-over-year rise and a 20% surge from September. The revenue boost was largely attributed to the National Day holiday, a seven-day event celebrating the founding of the People’s Republic of China, which significantly increased daily border crossings to nearly 142,000, surpassing pre-pandemic levels.
The influx of visitors during the National Day celebrations contributed to Macau’s success, allowing the October GGR to surpass May’s $2.52 billion, previously the highest in 2024. With October’s record-setting figures, the total GGR for the year reached $23.74 billion, marking a 28% increase compared to the same period last year. However, despite the notable rebound, the revenues remain 23% lower than those recorded from January to October in 2019.
Despite this positive financial performance, shareholder sentiment toward Macau’s six major casino operators—Sands, Galaxy, Wynn, MGM, Melco, and SJM—remains cautious. Several factors contribute to this wariness, including China’s strict enforcement of the “zero-COVID” policy until the end of 2022 and recent crackdowns on money laundering activities linked to Macau’s junket industry. These regulatory changes have delayed a full post-pandemic recovery for the gaming sector.
Further complicating the outlook for these casino operators is the substantial financial commitment required to secure new 10-year gaming licenses, which necessitated investing around $16.2 billion into various nongaming projects. These investments aim to diversify Macau’s economy and reduce its dependency on gambling by transforming the region into a hub for leisure, family activities, and nongaming businesses.
Despite these challenges, October provides a much-needed buoyancy for both casinos and their shareholders, with positive movements observed in Macau casino stocks. However, significant concerns persist, particularly regarding China’s crackdown on unlicensed money exchanges around resort areas. This crackdown poses a substantial hurdle for high rollers and prominent players who previously used these exchanges to circumvent Beijing’s tight capital control regulations.
Travel restrictions add another layer of complexity, as visitors to Macau are currently limited to carrying no more than $15,000 in cash. Those who exceed this limit must undergo more rigorous customs procedures via the “Red Channel,” potentially leading to confiscation of undeclared assets unless a valid reason for their possession is provided.
Overall, while October’s performance indicates a strong recovery trajectory for Macau’s casino industry, various market headwinds and regulatory challenges continue to temper investor optimism for the future.
